ARTICLES OF ORGANIZATION
SERVICE BANCORP, INC.
ARTICLE I. NAME
The exact name of the corporation is: Service Bancorp, Inc.
ARTICLE II. PURPOSE
The purpose of the corporation is to engage in the following business
activities: To buy, sell, deal in, or hold securities of every kind and
description; and in general to carry on any business permitted to corporations
organized under Chapter 156B of the Massachusetts General Laws as now in force
or hereafter amended.
ARTICLE III. AUTHORIZED CAPITAL STOCK
The total number of shares and par value of each class of stock that
the Corporation is authorized to issue is as follows:
Common: 12,000,000 shares, $.01 par value
Preferred: 5,000,000 shares, $.01 par value
ARTICLE IV. CAPITAL STOCK
A description of the different classes and series of the Corporation's
capital stock and a statement of the designations, and the relative rights,
preferences and limitations of the shares of each class and series of capital
stock are as follows:
A. Common Stock. Except as provided by law or in this ARTICLE IV
(or in any certificate of establishment of series of preferred stock),
holders of the Common Stock shall exclusively possess all voting
power. Each holder of shares of Common Stock shall be entitled to one
vote on all matters for each share held by such holder. There shall be
no cumulative voting rights in the election of Directors.
Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the Common Stock as to the payment of dividends, the full amount
of dividends and of sinking fund, retirement fund or other retirement payments,
if any, to which such holders are respectively entitled in preference to the
Common Stock, then dividends may be paid on the Common Stock and on any class or
series of stock entitled to participate therewith as to dividends, out of any
assets legally available for the payment of dividends; but only when and as
declared by the Board of Directors.
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In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid to or set aside for the holders of
any class having preferences over the Common Stock in the event of liquidation,
dissolution or winding up of the full preferential amounts of which they are
respectively entitled, the holders of the Common Stock, and of any class or
series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets, shall be entitled, after payment or provision for
payment of all debts and liabilities of the Corporation, to receive the
remaining assets of the Corporation available for distribution, in cash or in
kind, in proportion to their holdings.
Each share of Common Stock shall have the same relative rights as, and
be identical in all respects with, all the other shares of Common Stock.
B. Preferred Stock. Subject to any limitations prescribed by law,
the Board of Directors of the Corporation is authorized, by vote or
votes from time to time adopted, to provide for the issuance of one or
more classes of preferred stock, which shall be separately identified.
The Board of Directors shall have the authority to divide any
authorized class of preferred stock of the Corporation into one or
more series, to establish or change from time to time the number of
shares to be included in each such series, and to fix and state the
voting powers, designations, preferences and relative, participating,
optional or other special rights of the shares of any series so
established and the qualifications, limitations and restrictions
thereof. Each series shall be separately designated so as to
distinguish the shares thereof from the shares of all other series and
classes. The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of one or
more of the following:
1. The distinctive serial designation and the number of shares
constituting such series;
2. The dividend rates or the amount of dividends to be paid on
the shares of such series, whether dividends shall be
cumulative and, if so, from which date or dates, the payment
date or dates for dividends, and the participating or other
special rights, if any, with respect to dividends;
3. The voting powers, full or limited, if any, of shares of
such series;
4. Whether the shares of such series shall be redeemable and,
if so, the price or prices at which, and the terms and
conditions on which, such shares may be redeemed;
5. The amount or amounts payable upon the shares of such series
in the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
6. Whether the shares of such series shall be entitled to the
benefit of a sinking or retirement fund to be applied to the
purchase or redemption of such shares, and if so entitled,
the amount of such fund and the manner of its application,
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including the price or prices at which such shares may be
redeemed or purchased through the application of such fund;
7. Whether the shares of such series shall be convertible into,
or exchangeable for, shares of any other class or classes or
of any other series of the same or any other class or
classes of stock of the Corporation, and if so convertible
or exchangeable, the conversion price or prices or the rate
or rates of exchange, and the adjustments thereof, if any,
at which such conversion or exchange may be made, and any
other terms and conditions of such conversion or exchange;
8. The price or other consideration for which the shares of
such series shall be issued;
9. Whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued
shares of preferred stock and whether such shares may be
reissued as shares of the same or any other series of stock;
and
10. Such other powers, preferences, rights, qualifications,
limitations and restrictions thereof as are permitted by law
and as the Board of Directors of the Corporation may deem
advisable.
Any such vote shall become effective when the Corporation files with
the Secretary of State of The Commonwealth of Massachusetts a certificate of
establishment of one or more series of preferred stock signed by the President
or any Vice President and by the Clerk, Assistant Clerk, Secretary or Assistant
Secretary of the Corporation, setting forth a copy of the vote of the Board of
Directors establishing and designating the series and fixing and determining the
relative rights and preferences thereof, the date of adoption of such vote and a
certification that such vote was duly adopted by the Board of Directors.
Each share of each series of preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
Subject to the authority of the Board of Directors as set forth in
Paragraph 9 above, any shares of Preferred Stock shall, upon reacquisition
thereof by the Corporation, be restored to the status of authorized but unissued
Preferred Stock under this Section B.
Except as specifically provided in these Articles, the holders of
Preferred Stock or Common Stock shall not be entitled to any vote and shall not
have any voting rights concerning the designation or issuance of any shares of
Preferred Stock authorized by and complying with the conditions of these
Articles, and subject to the authority of the Board of Directors or any
authorized committee thereof as set forth above, the right to any such vote is
expressly waived by all present and future holders of the capital stock of the
Corporation.
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ARTICLE V. RESTRICTIONS ON TRANSFER OF SHARES
The restrictions, if any, imposed by these Articles upon the transfer
of shares of any class are: None.
ARTICLE VI. OTHER LAWFUL PROVISIONS
6.1 Corporate Governance
The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Directors and stockholders:
A. The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors. In addition to
the powers and authority expressly conferred upon them by statute or
by these Articles or the Bylaws of the Corporation, the Directors are
hereby empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation.
B. The Directors of the Corporation need not be elected by
written ballot unless the Bylaws so provide or unless so requested by
a stockholder entitled to vote thereon.
C. Any action to be taken by the stockholders of the Corporation
must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by the
unanimous consent in writing by such stockholders.
D. Special meetings of stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution adopted
by a majority of the total number of authorized directorships (whether
or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board for adoption) (the "Whole Board"), (provided, however, that if
there is an Interested Stockholder (as defined in Section C of Section
6.4), any such call by the Board of Directors shall also require the
affirmative vote of a majority of the Disinterested Directors (as
defined in Section C of Section 6.4) then in office). Special meetings
shall be called by the Clerk, or in the case of the death, absence,
incapacity or refusal of the Clerk, by any other officer, upon written
application of one or more stockholders who hold at least 80% in
interest of the capital stock entitled to vote at such meeting.
Application to a court pursuant to Section 34(b) of Chapter 156B (the
"Massachusetts Business Corporation Law") of the General Laws of The
Commonwealth of Massachusetts (or successor provisions) requesting the
call of a special meeting of stockholders because none of the officers
is able and willing to call such a meeting may be made only by
stockholders who hold at least 80% in interest of the capital stock
entitled to vote at such meeting. At a special meeting of
stockholders, only such business shall be conducted, and only such
proposals shall be acted upon, as shall have been stated in the
written notice of the special meeting, unless otherwise provided by
law.
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6.2 Directors
A. The number of Directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted
by a majority of the Whole Board. The Directors shall be divided into
three classes, with the term of office of the first class to expire at
the first annual meeting of stockholders, the term of office of the
second class to expire at the annual meeting of stockholders one year
thereafter and the term of office of the third class to expire at the
annual meeting of stockholders two years thereafter. At each annual
meeting of stockholders following such initial classification and
election, Directors elected to succeed those Directors whose terms
expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election.
B. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, newly created directorships
resulting from any increase in the authorized number of Directors or
any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or
other cause may be filled only by a majority vote of the Directors
then in office, though less than a quorum (provided, however, that if
there is an Interested Stockholder, any such action by the Board of
Directors shall also require the affirmative vote of a majority of the
Disinterested Directors then in office), and Directors so chosen shall
hold office for a term expiring at the annual meeting of stockholders
at which the term of office of the class to which they have been
chosen expires. No decrease in the number of Directors constituting
the Board of Directors shall shorten the term of any incumbent
Director.
C. Advance notice of stockholder nominations for the election of
Directors and of business to be brought by stockholders before any
meeting of the stockholders of the Corporation shall be given in the
manner provided in the Bylaws of the Corporation.
D. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any Director, or the entire Board of
Directors, may be removed from office at any time, but only for cause
and only by the affirmative vote of the holders of at least 80% of the
voting power of all of the then-outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
Directors, voting together as a single class. At least 30 days prior
to such meeting of stockholders, written notice shall be sent to the
Director whose removal will be considered at the meeting and the
Director will be provided an opportunity to be heard before the
stockholders.
6.3 Amendment to Bylaws. The Board of Directors is expressly empowered
to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment
or repeal of the Bylaws of the Corporation by the Board of Directors shall
require the approval of a majority of the Whole Board (unless at the time of
such action there shall be an Interested Stockholder, in which case such action
shall require the affirmative vote of a majority of the Disinterested Directors
then in office at such meeting). The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by these Articles, the affirmative vote of the
holders of at least 80% of the voting power of all of the then-outstanding
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shares of the capital stock of the Corporation entitled to vote generally in the
election of Directors, voting together as a single class, shall be required to
adopt, amend or repeal any provisions of the Bylaws of the Corporation.
6.4 Certain Business Combinations
A. In addition to any affirmative vote required by law or these
Articles, and except as otherwise expressly provided in this Section
6.4:
1. any merger or consolidation of the Corporation or any
Subsidiary (as defined in Section C of this Section 6.4) with (i)
any Interested Stockholder (as defined in Section C of this
Section 6.4), or (ii) any other corporation (whether or not
itself an Interested Stockholder) which is, or after such merger
or consolidation would be, an Affiliate (as defined in Section C
of this Section 6.4) of an Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder, or any
Affiliate of any Interested Stockholder, of any assets of the
Corporation or any Subsidiary having an aggregate Fair Market
Value (as herein defined in Section C of this Section 6.4)
equaling or exceeding 25% or more of the combined assets of the
Corporation and its Subsidiaries; or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of
any securities of the Corporation or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested
Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value
(as defined in Section C of this Section 6.4) equaling or
exceeding 25% of the combined Fair Market Value of the
outstanding Common Stock of the Corporation and its Subsidiaries,
except for any issuance or transfer pursuant to an employee
benefit plan of the Corporation or any Subsidiary thereof
(established with the approval of a majority of the Disinterested
Directors then in office); or
4. the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of any Interested
Stockholder; or
5. any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which has
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested
Stockholder;
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shall require the affirmative vote of the holders of at least 80%
of the voting power of the then-outstanding shares of stock of
the Corporation entitled to vote in the election of Directors
(the "Voting Stock"), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that
no vote may be required, or that a lesser percentage may be
specified, by law or by any other provisions of these Articles or
any Certificate of Establishment or in any agreement with any
national securities exchange or otherwise.
The term "Business Combination" as used in this Section 6.4 shall mean
any transaction which is referred to in any one or more of paragraphs 1 through
5 of Section A of this Section 6.4.
B. The provisions of Section A of this Section 6.4 shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only the affirmative vote of the majority of
the outstanding shares of capital stock entitled to vote, or such vote
(if any), as is required by law or by these Articles, if, in the case
of any Business Combination that does not involve any cash or other
consideration being received by the stockholders of the Corporation
solely in their capacity as stockholders of the Corporation, the
condition specified in the following paragraph 1 is met or, in the
case of any other Business Combination, all of the conditions
specified in either of the following paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by a
majority of the Disinterested Directors (as defined in Section C
of this Section 6.4) then in office.
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per
share by the holders of Common Stock in such Business Combination
shall at least be equal to the higher of the following
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the
Interested Stockholder or any of its Affiliates for any
shares of Common Stock acquired by it (i) within the
two-year period immediately prior to the first public
announcement of the proposal of the Business Combination
(the "Announcement Date"), or (ii) in the transaction in
which it became an Interested Stockholder, whichever is
higher.
(2) the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such latter
date is referred to in this Section 6.4 as the
"Determination Date"), whichever is higher.
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(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per
share by holders of shares of any class of outstanding Voting
Stock other than Common Stock shall be at least equal to the
highest of the following (it being intended that the requirements
of this subparagraph (b) shall be required to be met with respect
to every such class of outstanding Voting Stock, whether or not
the Interested Stockholder has previously acquired any shares of
a particular class of Voting Stock):
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the
Interested Stockholder for any shares of such class of
Voting Stock acquired by it (i) within the two-year period
immediately prior to the Announcement Date, or (ii) in the
transaction in which it became an Interested Stockholder,
whichever is higher;
(2) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
(3) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(c) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of
Voting Stock. If the Interested Stockholder has paid for shares
of any class of Voting Stock with varying forms of consideration,
the form of consideration to be received per share by holders of
shares of such class of Voting Stock shall be either cash or the
form used to acquire the largest number of shares of such class
of Voting Stock previously acquired by the Interested
Stockholder. The price determined in accordance with subparagraph
B.2 of this Section 6.4 shall be subject to appropriate
adjustment in the event of any stock dividend, stock split,
combination of shares or similar event.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (1) except as approved by a majority of the
Disinterested Directors (as defined in Section C of this Section
6.4) then in office, there shall have been no failure to declare
and pay at the regular date therefor any full quarterly dividends
(whether or not cumulative) on any outstanding stock having
preference over the Common Stock as to dividends or liquidation;
(2) there shall have been (i)
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no reduction in the annual rate of dividends paid on the Common
Stock (except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the
Disinterested Directors then in office, and (ii) an increase in
such annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of
the Common Stock, unless the failure to so increase such annual
rate is approved by a majority of the Disinterested Directors
then in office, and (3) neither such Interested Stockholder or
any of its Affiliates shall have become the beneficial owner of
any additional shares of Voting Stock except as part of the
transaction which results in such Interested Stockholder becoming
an Interested Stockholder.
(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided, directly or indirectly,
by the Corporation, whether in anticipation of or in connection
with such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, and the rules or regulations thereunder) shall be
mailed to stockholders of the Corporation at least 30 days prior
to the consummation of such Business Combination (whether or not
such proxy or information statement is required to be mailed
pursuant to such Act or subsequent provisions).
C. For the purposes of Section 6.1 and this Section 6.4:
1. A "Person" shall include an individual, a group acting in
concert, a corporation, a partnership, an association, a joint
venture, a pool, a joint stock company, a trust, an unincorporated
organization or similar company, a syndicate or any other group formed
for the purpose of acquiring, holding or disposing of securities or
any other entity.
2. "Interested Stockholder" shall mean any person (other than the
Corporation or any Holding Company or Subsidiary thereof) who or
which:
(a) is the beneficial owner, directly or indirectly, of more
than 5% of the outstanding Voting Stock; or
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(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 5%
or more of the voting power of the then outstanding Voting Stock;
or
(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year
period immediately prior to the date in question beneficially
owned by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended.
3. "Beneficial ownership" shall be determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934 (or any successor rule or statutory provision),
or, if said Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto, pursuant to said Rule
13d-3 as in effect on the date of filing of these Articles; provided,
however, that a person shall, in any event, also be deemed the
"beneficial owner" of any Common Stock:
(a) which such person or any of its affiliates beneficially
owns, directly or indirectly; or
(b) which such person or any of its affiliates has (i) the
right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement,
arrangement or understanding (but shall not be deemed to be the
beneficial owner of any voting shares solely by reason of an
agreement, contract, or other arrangement with this Corporation
to effect any transaction which is described in any one or more
clauses of Section A of Section 6.4) or upon the exercise of
conversion rights, exchange rights, warrants, or options or
otherwise, or (ii) sole or shared voting or investment power with
respect thereto pursuant to any agreement, arrangement,
understanding, relationship or otherwise (but shall not be deemed
to be the beneficial owner of any voting shares solely by reason
of a revocable proxy granted for a particular meeting of
stockholders, pursuant to a public solicitation of proxies for
such meeting, with respect to shares of which neither such person
nor any such affiliate is otherwise deemed the beneficial owner);
or
(c) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or any of
its affiliates acts as a partnership, limited partnership,
syndicate or other group pursuant to any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of this Corporation;
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and provided further, however, that (1) no Director or Officer of
this Corporation (or any affiliate of any such Director or
Officer) shall, solely by reason of any or all of such Directors
or Officers acting in their capacities as such, be deemed, for
any purposes hereof, to beneficially own any Common Stock
beneficially owned by another such Director or Officer (or any
affiliate thereof, and (2) neither any employee stock ownership
plan or similar plan of this Corporation or any subsidiary of
this Corporation, nor any trustee with respect thereto or any
affiliate of such trustee (solely by reason of such capacity of
such trustee), shall be deemed, for any purposes hereof, to
beneficially own any Common Stock held under any such plan. For
purposes of computing the percentage beneficial ownership of
Common Stock of a person, the outstanding Common Stock shall
include shares deemed owned by such person through application of
this subsection but shall not include any other Common Stock
which may be issuable by this Corporation pursuant to any
agreement, or upon exercise of conversion rights, warrants or
options, or otherwise. For all other purposes, the outstanding
Common Stock shall include only Common Stock then outstanding and
shall not include any Common Stock which may be issuable by this
Corporation pursuant to any agreement, or upon the exercise of
conversion rights, warrants or options, or otherwise.
4. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, as
in effect on the date of filing of these Articles.
5. "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Interested Stockholder set forth in Paragraph 2 of this
Section C, the term "Subsidiary" shall mean only a corporation of
which a majority of each class of equity security is owned, directly
or indirectly, by the Corporation.
6. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was
a member of the Board of Directors prior to the time that the
Interested Stockholder became an Interested Stockholder, and any
Director who is thereafter chosen to fill any vacancy of the Board of
Directors or who is elected and who, in either event, is unaffiliated
with the Interested Stockholder and in connection with his initial
assumption of office is recommended for appointment or election by a
majority of Disinterested Directors then in office.
7. "Fair Market Value" means:
(a) in the case of stock, the highest closing sales price of
the stock during the 30-day period immediately preceding the date
in question of a share of such stock on the National Association
of Securities Dealers Automated
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Quotation System or any system then in use, or, if such stock is
admitted to trading on a principal United States securities
exchange registered under the Securities Exchange Act of 1934, as
amended, Fair Market Value shall be the highest sale price
reported during the 30-day period preceding the date in question,
or, if no such quotations are available, the Fair Market Value on
the date in question of a share of such stock as determined by
the Board of Directors in good faith, in each case with respect
to any class of stock, appropriately adjusted for any dividend or
distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a
greater number of shares of such stock or any combination or
reclassification of outstanding shares of such stock into a
smaller number of shares of such stock, and
(b) in the case of property other than cash or stock, the
Fair Market Value of such property on the date in question as
determined by the Board of Directors in good faith.
8. Reference to "Highest Per Share Price" shall in each case with
respect to any class of stock reflect an appropriate adjustment for
any dividend or distribution in shares of such stock or any stock
split or reclassification of outstanding shares of such stock into a
greater number of shares of such stock or any combination or
reclassification of outstanding shares of such stock into a smaller
number of shares of such stock.
9. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in Subparagraphs (a) and (b) of Paragraph 2 of
Section B of this Section 6.4 shall include the shares of Common Stock
and/or the shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
D. A majority of the Directors of the Corporation then in office
(provided, however, that if there is an Interested Stockholder, any such
determination shall also require the affirmative vote of a majority of the
Disinterested Directors then in office) shall have the power and duty to
determine for the purposes of this Section 6.4, on the basis of information
known to them after reasonable inquiry: (a) whether a person is an Interested
Stockholder; (b) the number of shares of Voting Stock beneficially owned by any
person; (c) whether a person is an Affiliate or Associate of another; and (d)
whether the assets which are the subject of any Business Combination have, or
the consideration to be received for the issuance or transfer of securities by
the Corporation or any Subsidiary in any Business Combination has, an aggregate
Fair Market Value equaling or exceeding 25% of the combined Fair Market Value of
the Common Stock of the Corporation and its Subsidiaries. A majority of the
Disinterested Directors then in office shall have the further power to interpret
all of the terms and provisions of this Section 6.4.
E. Nothing contained in the Section 6.4 shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
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F. Notwithstanding any other provisions of these Articles or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of the Voting Stock required by law, these Articles or any Certificate of
Establishment, the affirmative vote of the holders of at least 80% of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend or repeal this Section 6.4.
6.5 Standards for Board of Directors' Evaluation of Offers. The Board
of Directors of the Corporation, in determining whether the interests of the
Corporation and its stockholders will be served by any offer of another Person
(as defined in Section 6.4) to (i) make a tender or exchange offer for any
equity security of the Corporation, (ii) merge or consolidate the Corporation
with or into another institution, or (iii) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, may consider
the interests of the Corporation's employees, suppliers, creditors and
customers, the economy of the state, region and nation, community and societal
considerations, and the long-term and short-term interests of the Corporation
and its stockholders, including the possibility that these interests may be best
served by the continued independence of the Corporation.
6.6 Indemnification
A. Each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he is or was a Director or an
Officer of the Corporation or is or was serving at the request of the
Corporation as a Director, Officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a Director, Officer, employee or agent or in any other
capacity while serving as a Director, Officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Massachusetts Business Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered
by such indemnitee in connection therewith; provided, however, that, except
as provided in Section C hereof with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this Section
6.6 shall include, in the case of a Director or officer at the level of
Vice President or above, and in the case of any other Officer or any
employee may include (in the discretion of the Board of Directors), the
right to be paid by the Corporation the expenses incurred in defending any
such proceeding
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in advance of its final disposition (hereinafter an "advancement of
expenses"). Notwithstanding the foregoing, expenses incurred by an
indemnitee in advance of the final disposition of a proceeding may be paid
only upon the Corporation's receipt of an undertaking by the indemnitee to
repay such payment if he shall be adjudicated or determined to be not
entitled to indemnification under applicable law. The Corporation may
accept such undertaking without reference to the financial ability of the
Indemnitee to make such repayment. The rights to indemnification and to the
advancement of expenses conferred in Sections A and B of this Section 6.6
shall be contract rights and such rights shall continue as to an indemnitee
who has ceased to be a Director, Officer, employee or agent and shall inure
to the benefit of the indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Section 6.6 is not paid in
full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be
twenty days, the indemnitee may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the Corporation
to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee also shall be entitled to be paid the expense
of prosecuting or defending such suit. In (i) any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in a
suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking the Corporation shall be entitled to recover such expenses
upon a final adjudication that, he shall not have acted in good faith in
the reasonable belief that his action was in the best interests of the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification
of the indemnitee is proper in the circumstances because the indemnitee has
met the applicable standard of conduct set forth in the Massachusetts
Business Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by
the indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving
that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Section 6.6 or otherwise, shall be on
the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Section 6.6 shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
Corporation's Articles, Bylaws, agreement, vote of stockholders or
disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any Director, Officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the
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Corporation would have the power to indemnify such person against such
expense, liability or loss under the Massachusetts Business Corporation
Law.
F. The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Section 6.6 with respect to the
indemnification and advancement of expenses of Directors and Officers of
the Corporation. Without limiting the generality of the foregoing, the
Corporation may enter into specific agreements, commitments or arrangements
for indemnification on any terms not prohibited by law which it deems to be
appropriate.
G. If the Corporation is merged into or consolidated with another
corporation and the Corporation is not the surviving corporation, the
surviving Corporation shall assume the obligations of the Corporation under
this Section 6.6 with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or
facts occurring at or prior to the date of such merger or consolidation.
6.7 Limitation of Liability of Directors.
A. No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director notwithstanding any provision of law imposing
such liability; provided, however, that this Section 6.7 shall not
eliminate or limit any liability of a Director (i) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Sections 61 or 62 of Chapter
156B of the General Laws of the Commonwealth of Massachusetts, or (iv) with
respect to any transaction from which the Director derived an improper
personal benefit.
B. No amendment or repeal of this Section 6.7 shall adversely affect
the rights and protection afforded to a Director of this Corporation under
this Section 6.7 for acts or omissions occurring prior to such amendment or
repeal. If the Massachusetts Business Corporation Law is hereafter amended
to further eliminate or limit the personal liability of Directors or to
authorize corporate action to further eliminate or limit such liability,
then the liability of the Directors of this Corporation shall be eliminated
or limited to the fullest extent permitted by the Massachusetts Business
Corporation Law as so amended.
6.8 Transactions with Interested Persons
A. Unless entered into in bad faith, no contract or transaction by the
Corporation shall be void, voidable or in any way affected by reason of the
fact that it is with an Interested Person.
B. For the purposes of this Section 6.8, "Interested Person" means any
person or organization in any way interested in the Corporation whether as
a director, officer, stockholder,
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employee or otherwise, and any other entity in which any such person or
organization of the Corporation is in any way interested.
C. Unless such contract or transaction was entered into in bad faith,
no Interested Person, because of such interest, shall be liable to the
Corporation or to any other person or organization for any loss or expense
incurred by reason of such contract or transaction or shall be accountable
for any gain or profit realized from such contract or transaction.
D. The provisions of this Section 6.8 shall be operative
notwithstanding the fact that the presence of an Interested Person was
necessary to constitute a quorum at a meeting of Directors or stockholders
of the Corporation at which such contract or transaction was authorized or
that the vote of an Interested Person was necessary for the authorization
of such contract or transaction.
6.9 Acting as a Partner
The Corporation may be a partner in any business enterprise which it
would have power to conduct by itself.
6.10 Stockholders' Meetings
Meetings of stockholders may be held at such place in The Commonwealth
of Massachusetts or, if permitted by applicable law, elsewhere in the United
States as the Board of Directors may determine.
6.11 Ownership of Voting Stock by Mutual Holding Company
At all times so long as Service Bancorp, MHC (the "Mutual Holding
Company"), the majority holder of the Corporation's Common Stock, shall be in
existence, the Mutual Holding Company shall own at least a majority of the
Voting Stock of the Corporation and the Corporation shall not be authorized to
issue any shares of Voting Stock or take any action while the Mutual Holding
Company is in existence if after such issuance or action the Mutual Holding
Company shall own less than the majority of the Corporation's Voting Stock. For
these purposes, "Voting Stock" means Common Stock or preferred stock, or similar
interests if the shares by statute, charter or in any manner, entitle the
holder: (i) to vote for or to select directors of the Corporation; and (ii) to
vote on or to direct the conduct of the operations or other significant policies
of the Corporation. Notwithstanding anything in the preceding sentence,
preferred stock is not "Voting Stock" if: (i) voting rights associated with the
preferred stock are limited solely to the type customarily provided by statute
with regard to matters that would significantly and adversely affect the rights
or preferences of the preferred stock, such as the issuance of additional
amounts or classes of senior securities, the modification of the terms of the
preferred stock, the dissolution of the Corporation, or the payment of dividends
by the Corporation when preferred dividends are in arrears; (ii) the preferred
stock represents an essentially passive investment or financing device and does
not otherwise provide the holder with control over the Corporation; and (iii)
the preferred stock does not at the time entitle the holder, by statute,
charter, or otherwise,
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to select or to vote for the selection of directors of the Corporation.
Notwithstanding anything in the preceding two sentences, "Voting Stock" shall be
deemed to include preferred stock and other securities that, upon transfer or
otherwise, are convertible into Voting Stock or exercisable to acquire Voting
Stock where the holder of the stock, convertible security or right to acquire
Voting Stock has the preponderant economic risk in the underlying Voting Stock.
Securities immediately convertible into Voting Stock at the option of the holder
without payment of additional consideration shall be deemed to constitute the
Voting Stock into which they are convertible; other convertible securities and
rights to acquire Voting Stock shall not be deemed to vest the holder with the
preponderant economic risk in the underlying Voting Stock if the holder has paid
less than 50% of the consideration required to directly acquire the Voting Stock
and has no other economic interest in the underlying Voting Stock.
6.12 Conversion Transaction
A. In the event that the Mutual Holding Company elects to convert to
stock form in accordance with applicable law and regulation (a "Conversion
Transaction"), the Mutual Holding Company or its successor may merge or
combine with the Corporation, Summit Bank (the "Bank"), the Corporation's
wholly-owned subsidiary or any other corporation formed or controlled by
the Mutual Holding Company or the Corporation, and the depositors of the
Bank will receive the right to subscribe for a number of shares of Common
Stock of the surviving or resulting corporation determined as set forth in
the Stock Issuance Plan (the "Plan") of the Bank and the Mutual Holding
Company. The additional shares of Common Stock of the Corporation issued in
the Conversion Transaction shall be sold at their aggregate pro forma
market value. Pursuant to the Plan, in any Conversion Transaction, the
minority stockholders of the Corporation (who consist of the holders of
Common Stock other than the Mutual Holding Company), will be entitled to
maintain the same percentage ownership interest in the Common Stock of the
Corporation (or the resulting corporation) after the Conversion Transaction
as their ownership interest in the Common Stock of the Corporation
immediately prior to the Conversion Transaction, subject only to adjustment
(if required by federal or state law, regulation, or regulatory policy) to
reflect (i) the cumulative effect of the aggregate amount of dividends
waived by the Mutual Holding Company, (ii) the market value of assets of
the Mutual Holding Company (other than Common Stock of the Corporation) and
(iii) any other factors required by applicable law.
B. At the sole discretion of the Board of Trustees of the Mutual
Holding Company and the Board of Directors of the Corporation, a Conversion
Transaction may be effected in any other manner necessary to qualify the
Conversion Transaction as a tax-free reorganization under applicable
federal and state tax laws, provided such Conversion Transaction does not
diminish the rights and ownership interest of Minority Stockholders as set
forth in the preceding paragraphs of this Section 6.12. If a Conversion
Transaction does not occur, the Mutual Holding Company will always own a
majority of the Voting Stock of the Corporation.
6.13 Amendment to Articles of Organization.
These Articles may be amended at a duly constituted meeting of
stockholders called expressly for such purpose, by the affirmative vote of at
least 80% of the total votes eligible to be
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cast by stockholders on such amendment, voting together as a single class;
provided, however, that if the Board of Directors recommends, by the affirmative
vote of at least two thirds of the Directors then in office at a duly
constituted meeting of the Board of Directors (unless at any time within the 60
day period immediately preceding the meeting at which the stockholder vote is to
be taken, there shall be an Interested Stockholder, in which case such action
shall also require the affirmative vote of a majority of the Disinterested
Directors then in office), that stockholders approve such amendment at such
meeting of stockholders, such amendment shall only require the affirmative vote
of a majority of the total votes eligible to be cast by stockholders on such
amendment, voting together as a single class.
ARTICLE VII. EFFECTIVE DATE
The effective date of organization of the Corporation shall be the date
approved and filed by the Secretary of the Commonwealth.
ARTICLE VIII. DIRECTORS AND OFFICERS
The information contained in Article VIII is not a permanent part of
the Articles of Organization.
a. The street address of the principal office of the Corporation in
Massachusetts is: 81 Main Street, Medway, Massachusetts 02053
b. The name, residential address and post office address of each Director and
Officer of the Corporation is as follows:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
---- ------------------- -------------------
President: Eugene G. Stone 151 King Street Franklin, MA 02038
Treasurer: Warren W. Chase 40 Clements Road Waltham, MA 02154
Clerk: James W. Murphy 234 Orchard Street Millis, MA 02054
Director: Eugene G. Stone 151 King Street Franklin, MA 02038
c. The fiscal year (i.e., tax year) of the Corporation shall end on the last
day of the month of: June
d. The name and business address of the resident agent, if any, of the
Corporation is: NONE
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ARTICLE IX. BYLAWS
Bylaws of the Corporation have been duly adopted and the President,
Treasurer, Clerk and Directors whose names are set forth above, have been duly
elected.
IN WITNESS WHEREOF AND UNDER THE PAINS AND PENALTIES OF PERJURY, I/we, whose
signature(s) appear below as incorporator(s) and whose name(s) and business or
residential address(es) are clearly typed or printed beneath each signature do
hereby associate with the intention of forming this Corporation under the
provisions of General Laws, Chapter 156B and do hereby sign these Articles of
Organization as incorporator(s) this _______ day of _______, 1998
Robert B. Pomerenk, Esq.
Luse Lehman Gorman Pomerenk & Schick
5335 Wisconsin Avenue, N.W., Suite 400
Washington, DC 20015
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